Yorkshire Post

According to government Ministers and Spin doctors the choice before the public is a stark one – Labour investment or Tory cuts. At the heart of this battleground is the NHS, the largest single spender amongst the public service departments. So often these days Mr Brown’s statements are flanked by pictures or comments on the NHS, as he thinks this will be the defining issue of the coming election.

The Conservatives have been very cautious about the NHS. Mr Cameron has strong personal experience of its importance through his family. Any Conservative politician who wants to be re-elected knows that the pledge of care free for all in need is an important one. There are no votes in wanting to close wards and sack nurses, and I don’t know any elected Conservative who has ever wanted to do that. Yet time and again Conservatives are wrongly represented by their opponents as wishing to do just that.

This week David Cameron went further than before in talking about NHS spending. Instead of just repeating his pledges to look after the NHS , he also said that the NHS like the rest of the public sector, had to make economies where it could, whilst raising the quality of what it offered. He will doubtless again be wrongly accused of wanting to cut the NHS, rather than wanting to cut waste and bureaucracy within the NHS. The government often implies no cuts of any kind are possible without damaging front line services.

So who said the NHS should face value for money savings of £8.2 billion by 2010-11 compared to 2007-8? No, not David Cameron, but the government. Whilst implying in the political debate that the NHS is fully efficient, the Ministry is busy telling the NHS to become more efficient at the rate of 3.5% a year in 2010-11, after demanding a 3% improvement this year.

Ministers and the Treasury have become alarmed by the lack of any growth in efficiency and productivity in the NHS. Between 1995 and 2001 productivity fell slightly. From 2001 to 2005 productivity fell by a massive 2.5% per annum, or by more than tenth. The following year saw a smaller fall of 0.2% . This led to the demands that the NHS cuts its costs and internal prices.

So what is curious about the political debate is that the two main parties have very similar policies on the NHS, yet Labour tries to make it such a huge defining issue as if there were major differences around their false analysis. The truth is very different. Both parties are committed to avoiding cuts in front line services, and both want to see more reductions in waste and inefficiency. So the real issue is, who will be more successful ae generating value for money? How feasible is it to expect major gains in quality and productivity from this huge service? How would you go about doing it?

There is a bigger difference over this between the two main parties. The Conservatives want to delegate more power and authority from the centre and the quangos, to the wards and surgeries themselves. Labour believe in the efficacy of many national interventions, endless orders and requirements from a large number of national quangos, with regional authorities offering direction and budget control. Their approach has led to the expensive national computerisation scheme, often resented by those who have to use it, and to events like the handling of swine flu leading to the creation of a new network of call centres offering advice and drugs outside the normal NHS framework.

My experience of management tells me you are more likely to succeed if you empower and trust people doing the work, than if you try to second guess and micromanage from a headquarters far away. Cutting out bureaucracy, form filling and box ticking from the centre and regions could free resources and raise spirits in the hospitals and GP centres, so more can be done for less. If there were fewer central targets distorting priorities, more sensible decisions might well be taken by doctors, nurses and other medical decision takers.

When I supervised the Welsh Health Service in the 1990s I found it was possible to take out cost and raise quality at the same time. I settled for one main executive branch under the control of the departmental Permanent Secretary, doing away with a separate CEO and his office. We invited the pharmaceutical companies to deliver drugs directly to the wards when they needed them, instead of us holding expensive stocks centrally. Many modern hospitals rely on too many expensive agency staff, which makes quality and efficiency more difficult to achieve as you are not working with experienced people who know your hospitals routines all the time. Absence and low morale are staff problems in part of the NHS.

Cutting out errors raises quality and lowers cost. Making fewer mistakes means less expensive litigation (now £1.1 billion a year and rising) and higher morale. Building and valuing experienced teams of people and giving them more say over how they do the job should cut cost and raise quality.

The real row over Health spending is not Tory cuts versus Labour investment as the government wants you to believe. It is between Conservative claims of devolved efficiency and Labour’s centralised waste. Even the government admits that, when they say they are now looking for large savings from within the huge NHS budget.

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One Comment

  1. Mike Stallard
    Posted August 24, 2009 at 3:58 pm | Permalink

    You are striking the very roots of Labour philosophy here.
    In the 19th century, where most myths started, the tory toffs ran the factories and believed in Bertie Wooster. The poor Labour people struck for the dockers’ tanner. “It’s ‘arder when you’re in the family way,” groaned the pregnant woman in the coal mine pulling her fully laden trolley uphill in the darkness…….
    It is all in the history books. “Dickens” is even taught in Primary Schools. Just take a look in the local paper to see all the little children being taught about 19th century history.
    Of course, therefore, since nothing has changed (two world wars? fifty years of American supremacy? technological revolution?globalisation?) it must be the Labour Brothers and Sisters who really, really care for the poor, while the tory toffs, who do not even believe in Comprehensive Education because they were members of the Bullinger Society when Bob Ainsworth was still working his way up through the Car Makers’ Union, go off to shoot grouse with Lord Astor and visit Peter on Mr Deripaska’s yacht.
    Luvvy, you know it makes sense.

    Logic is not the right attack.
    What is needed is a really good PR man. Now who could that be, I wonder?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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